When Phoenix City Manager David Cavazos leaves his post, he will qualify to receive full pension payouts in the six-figure range through the City of Phoenix Employee Retirement System because his age and years of service total 80.

Cavazos, who turned 53 in January, abruptly announced Thursday he would step down to become city manager of Santa Ana, Calif., a move that is pending Santa Ana City Council approval on Monday. Cavazos has been Phoenix city manager for four years and has been with the city since 1987.

If approved, Cavazos would likely leave Phoenix in mid-October, with nearly 27 years of service with the city.

Cavazos did not return calls on Thursday or Friday.

Phoenix spokeswoman Toni Maccarone said the city manager would not grant interviews until after the Santa Ana City Council meeting on Monday “out of respect for the process.”

“Retirement is a very personal decision,” Maccarone said. “I just would like to caution you on doing your own calculations because retirement calculations are very complicated, and until a person actually submits paperwork and gives a firm date of retirement, no one knows the exact numbers.”

Cavazos is Phoenix’s highest-paid employee. His average annual total compensation during his final three years would be significantly higher because he received a $78,000 raise last year, bringing his annual base pay to $315,000. A retiree’s annual pension is based on a formula that includes the final three-year average of an employee’s total compensation.

In addition, the municipal pension program in Phoenix allows employees to add deferred compensation, fringe and travel allowances, and sick leave into their benefit calculations to boost their pensions. It is unknown how many of those benefits the city will allow Cavazos to roll in to “spike” his annual retirement payout.

Cavazos has a contract calling for the city to contribute an additional amount equal to 11 percent of his annual pay, or $34,650, into a deferred-compensation account. Cavazos also is reimbursed 3 percent, or $9,450, of his required 5 percent annual contribution to the city’s main pension system, meaning he only pays in 2 percent.

Cavazos would receive his pension payouts from Phoenix in addition to his new city-manager salary in Santa Ana, if he is approved for that job. His base salary in Santa Ana would be $315,000, with total benefits that could cost the city more than half a million dollars a year, according to a preliminary agenda posted on the city’s website.

In March, Phoenix voters passed reforms aimed at controlling surging employee-pension costs. The measures will overhaul the retirement system for thousands of new city workers, potentially saving taxpayers nearly $600 million over 25 years. The reforms include not allowing a new employee to retire until the combination of that person’s age and years of service equals 87.

The reforms will not impact Cavazos, said Phoenix Councilman Daniel Valenzuela, who co-chaired the city’s pension-reform committee. “It’s for new employees. Anyone who is currently working with the city of Phoenix is essentially locked into a contract which includes their wages and benefits,” Valenzuela said.

Valenzuela said Cavazos’ salary — and the retirement benefits that come with it — were well deserved.

The councilman said Cavazos’ work during the economic downturn was exemplary.

“The city was facing in very recent history a 27 percent deficit: a $227 million deficit. And today there’s approximately $44 million in the contingency fund, the highest it’s ever been,” Valenzuela said.

Valenzuela said losing Cavazos shows that even after raising the city manager’s salary, Phoenix still struggles to remain competitive.

“I don’t foresee having to do it again. But even with Phoenix being the sixth-largest city in the country, David’s pay is still significantly lower than the seventh-largest city in the country, San Antonio,” he said. The top executive in San Antonio earns a base salary of $355,000. “But with that said, I still think that’s a very high salary.”

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